It can be tricky to decide the best way to save for your child: should you continue paying into the Child Trust Fund (CTF) or switch to a Junior ISA? This depends on you and your child’s circumstances, but in this article, we’ll take a closer look at CTFs and Junior ISAs and see which one might be better for older children.

The CTF scheme was created for children born between September 2002 and January 2011. If your child was eligible, then they would have received a voucher worth £250 or £500 depending on whether you were in receipt of certain benefits. The money could be saved until the child turned 18, at which point they could access it.

Junior ISAs (JISAs) were introduced in 2011, superseding CTFs. JISAs work in a similar way to adult ISAs, but with Junior ISAs the tax-free limit is £9,000. The real difference between an adult ISA and a JISA is that the funds cannot be accessed by the child until they turn 18.

As the CTF scheme ceased over a decade ago, so what is best for children aged 11 or over?

If your child has a CTF, many people choose to transfer the funds into a Junior ISA. There are two types of Junior ISA, Cash ISAs and Investment Junior ISAs. CTFs and Junior Cash and Investment ISAs cannot be accessed by the child until they have reached adulthood. 

Many Investment Junior ISA providers (like the Children’s ISA) provide your child with a range of options when it comes to how the funds are invested from Sharia-compliant to ethical funds. Here are some common questions we get asked about CTFs and JISAs:

Can I open a Junior ISA if I have a Child Trust Fund?

If you have a CTF, you can transfer the money into a Junior ISA. You cannot have a CTF and a Junior ISA (either cash or investment) at the same time.

How do I transfer a CTF to a Junior ISA?

Transferring a CTF to a Junior ISA is as easy as A, B, and C. Click here to find out how.

Does the government contribute to a Junior ISA?

No. Unlike Child Trust Funds, the government does not contribute to a Junior ISA fund. Ultimately, the decision of which one is best for your child depends on your individual circumstances. We hope this article has given you a better understanding of the savings and investment options open to you so that you can make an informed decision about what’s best for your child. If you have any other questions, please contact our team at our Manchester head office.